Yearly costs for CPA's

25 Replies

My team and I just met with a CPA firm and were quoted $280/ month for year 2019. This is to handle our salary, distribution, and monthly books. We have elected to be taxed as an S-Corp.

Just curious if this is reasonable or not. I've looked at some other posts on here from years back and have seen many at $150/ month. Maybe it's because I'm in Maryland near Annapolis and everything is expensive in this area.

Thank you

My personal opinion, and I may get some hate on this, but a CPA shouldn't be doing bookkeeping.

You can find heavy-hitter bookkeepers for $20-50/hour who are experts at their craft but don't have the CPA/EA title.  Bookkeeping is their wheelhouse.

Salary/payroll/employment tax returns can easily be outsourced to third party platforms (e.g. ADP, Paychex, Gusto, etc) that are priced reasonably, will keep you compliant, and will have that money deposited into your checking account automatically with a W-2 issued in January.

Not sure what you mean by 'handling your distribution'?  This probably should be a convo with your tax CPA to get the rundown on reasonable compensation, distributions, S Corp basis, etc.  This is an area where your tax CPA/EA will need to be involved.

I strongly disagree. 

"Bookkeepers" who work for $20-50 an hour are retired ladies who are self taught on quickbooks and don't know actual accounting. 

Then come year end you take your books to an actual professional and they charge you an extra $500 to clean it all up. 

@Ken Nyczaj

The pricing will depend on scope of work. 

I would honestly recommend using Gusto for your payroll needs- its $39 a month and $6 per employee. 

You mention you're an S corp- so I'm assuming you do flips? But without knowing how many projects, any other income streams, how many monthly transactions monthly ect...there's no way to say if that's a good price. 

Honestly- It's very low in the realm of good bookkeping help. If you just want data entry type work it's more on point. 

Originally posted by @Eamonn McElroy :

My personal opinion, and I may get some hate on this, but a CPA shouldn't be doing bookkeeping.

You can find heavy-hitter bookkeepers for $20-50/hour who are experts at their craft but don't have the CPA/EA title.  Bookkeeping is their wheelhouse.

Salary/payroll/employment tax returns can easily be outsourced to third party platforms (e.g. ADP, Paychex, Gusto, etc) that are priced reasonably, will keep you compliant, and will have that money deposited into your checking account automatically with a W-2 issued in January.

Not sure what you mean by 'handling your distribution'?  This probably should be a convo with your tax CPA to get the rundown on reasonable compensation, distributions, S Corp basis, etc.  This is an area where your tax CPA/EA will need to be involved.

100% agree. If you don't have any difficult transactions to record, pay a bookkeeper a couple hundred a month to record everything and then throw your CPA an extra $500 at year end to clean it up with some JEs and call it good. 

@Ken Nyczaj . It’s hard to gauge exactly if that’s fair or not but it’s probably high. Or it’s just average. I’m a bargain hunter. I spent money when I think it’s worth it and I don’t when I think I can do it cheaper or do it myself. You’ll see lots of CPAs on this thread say that the price you said is cheap or whatever but they’re obviously biased. I pay less then 1000 year for my taxes to be filed. This includes as many tax questions as I want to them. Granted I’m hos friend as well, so there may be a bit of a discount there. As far as bookkeeping goes, I would find software you like (I like wave, as it’s free) and either teach yourself how to use it or pay someone 15-25 dollars an hour for a couple hours a month to do it for you. This type of accounting isn’t hard. I can’t imagine paying someone 50 dollars an hour to do it. Now if you have hundreds of properties sure, but most people don’t hence it’s not that bad.
Originally posted by @Eamonn McElroy :

@Natalie Kolodij ""Bookkeepers" who work for $20-50 an hour are retired ladies who are self taught on quickbooks and don't know actual accounting."

That's a bit of a generalization don't you think?  I'm sure some are retired men.  :)

Lol sure there are some retired men too- I just wanted to paint the picture of who I generally who I come across in that range. 

These aren't the people who will give you budgets, cash flow projections, help YOU have the value of information you can use to help your portfolio grow. 

They will reconcile bank accounts tho. All day long.

Originally posted by @Eamonn McElroy :

@Natalie Kolodij ""Bookkeepers" who work for $20-50 an hour are retired ladies who are self taught on quickbooks and don't know actual accounting."

That's a bit of a generalization don't you think?  I'm sure some are retired men.  :)

 HA! well played.

@Brian M Sweeney @Eamonn McElroy @Natalie Kolodij @Caleb Heimsoth

Thank you for all the replies. We just sold our first flip on September 20th, and are working to put another one under contract this coming week. I'm also working with a different ground of partners under a separate LLC and we are looking to put our first property under contract next week.

The yearly fee I spoke of above is just for one LLC for the year 2019. If I Grant Cardone my goals that will be 60 flips! :) But we're going for at least 6 flips for 2019 so it would cost $280/ month for the CPA firms services.

The thing is we all work full time and trying to convince one team member to spend their time doing bookkeeping may or may not work, but it's worth a try. I'll do some research on the programs that you all referenced. 

If the expectation is that whoever is doing this work is providing business management recommendations & guidance (IE, they are part of the business team), then I would look a the CPA. 

If they are just doing the books and preparing data that you and your partners will use for decision making, I don't see why it couldn't be a bookkeeper. Could even be a 3rd or 4th year Finance/Accounting major college student doing it part time.  

Originally posted by @Ken Nyczaj:

@Brian M Sweeney @Eamonn McElroy @Natalie Kolodij 

... If I Grant Cardone my goals that will be 60 flips! :) But we're going for at least 6 flips for 2019 so it would cost $280/ month for the CPA firms services. 

If you Grant Cardone your business, you do not need accountants or any professionals, for that matter. You just need his books and a barrel of Cool-Aid  :)

I would say $280/month is not that expensive. I agree with Natalie, if you go super cheap with your bookkeeping you're probably using someone that just knows how to put transactions into categories and doesn't really understand the relationship between a balance sheet and PNL or proper accounting. You'll end up with inaccurate reporting and will need to clean it up for the end of the year.

Originally posted by @Natalie Kolodij :

I strongly disagree. 

"Bookkeepers" who work for $20-50 an hour are retired ladies who are self taught on quickbooks and don't know actual accounting. 

Then come year end you take your books to an actual professional and they charge you an extra $500 to clean it all up. 

@Ken Nyczaj

The pricing will depend on scope of work. 

I would honestly recommend using Gusto for your payroll needs- its $39 a month and $6 per employee. 

You mention you're an S corp- so I'm assuming you do flips? But without knowing how many projects, any other income streams, how many monthly transactions monthly ect...there's no way to say if that's a good price. 

Honestly- It's very low in the realm of good bookkeping help. If you just want data entry type work it's more on point. 

 WOW.... I am an accountant and I have an office and multiple clients and I think what you said about paying a bookkeeper is so wrong and sexist and oh my Gosh just mean and nasty.  CPA's over charge clients because the can.  A CPA gets 100-200 an hour. A bookkeeper gets between 30-60 an hour.  I don't think its fair to say that one is less educated. I did not sit for my CPA but I have the degree and the classes and the continuing education that they do.  I just didn't take the tests for that Licensing. That does not mean my business is a good company.   

As for the post if all the CPA is doing is looking over the number and doing a few general ledger end of month transactions then paying them 150 might be realistic. IF you are having them do all payroll and taxes for payroll then 280 does sound okay.  But if you had a bookkeeper doing this it would be like 180 a month or less for everything. 

You need to look at it this way.

Not all Bookkeepers are Accountants and not all Accountants are CPAs.

Bookkeepers are typically just data entry with a little knowledge of accounting.

Accountants typically have a degree in Accounting

CPAs are licensed.

Not all CPAs know real estate and that goes with Accountants too.

A few times I had to teach a CPA to learn how to book certain items correctly.

You want someone that show you the financials and break it down to you in details. CPAs normally will not do that.

Originally posted by @Michele B. :
Originally posted by @Natalie Kolodij:

I strongly disagree. 

"Bookkeepers" who work for $20-50 an hour are retired ladies who are self taught on quickbooks and don't know actual accounting. 

Then come year end you take your books to an actual professional and they charge you an extra $500 to clean it all up. 

@Ken Nyczaj

The pricing will depend on scope of work. 

I would honestly recommend using Gusto for your payroll needs- its $39 a month and $6 per employee. 

You mention you're an S corp- so I'm assuming you do flips? But without knowing how many projects, any other income streams, how many monthly transactions monthly ect...there's no way to say if that's a good price. 

Honestly- It's very low in the realm of good bookkeping help. If you just want data entry type work it's more on point. 

 WOW.... I am an accountant and I have an office and multiple clients and I think what you said about paying a bookkeeper is so wrong and sexist and oh my Gosh just mean and nasty.  CPA's over charge clients because the can.  A CPA gets 100-200 an hour. A bookkeeper gets between 30-60 an hour.  I don't think its fair to say that one is less educated. I did not sit for my CPA but I have the degree and the classes and the continuing education that they do.  I just didn't take the tests for that Licensing. That does not mean my business is a good company.   

As for the post if all the CPA is doing is looking over the number and doing a few general ledger end of month transactions then paying them 150 might be realistic. IF you are having them do all payroll and taxes for payroll then 280 does sound okay.  But if you had a bookkeeper doing this it would be like 180 a month or less for everything. 

A CPA gets $300 an hour. 

I know Bookkeepers who charge clients $4,500 a month for full service. It's all relevant. I never said one was less educated as a whole. 

I said in my experience the cheap ones are. Good help isn't cheap. Cheap help isn't good. 

If you have all of the education and experience and you're working for $30 an hour you're below industry standard pricing. 

There's nothing mean or nasty about it - it's just based on experience. The majority of "bookkeepers" I've worked with who work for $30 an hour know quickbooks, and don't know basic accounting. The problem is there's a huge spectrum of "bookkeeper". 

@Ken Nyczaj

To add what everyone was talking about with using a bookkeeper vs accountant vs CPA to do the accounting work. Flipping is a difficult business to understand, especially for tax purposes. I would not expect a bookkeeper who doesn't specialize in the flipping business to understand the transactions. As a result it would be difficult for them to properly do the books.

Regarding whether the costs are high or not...it depends.

It depends on several factors

1) How many shareholders are in the S-corp
2) Are you only doing business in one state or across multiple states
3) Is tax strategies discussions including in the pricing?
4) Does the pricing include communications with the accountant throughout the year?

You mentioned salary, distribution and monthly books were included. Does the cost also include the tax return?

$280 a month multiplied by 12 is $3,380.
Sometimes it's better/easier to see the gross number. I understand that a lot of companies are moving to a monthly pricing/subscription model. 
Consumers often are less concerned when seeing a smaller monthly number than the larger gross figure.

Hi @Ken Nyczaj

Your CPA/Accountant/Advisor/Tax Person should all be an investment not an expense.

What are they doing for you to help you make or save more money?

Someone charging 280/month for just doing your books and taxes is ok.

Someone charging 1000/month and helping you make $5000/month is definitely a better option.

It all comes down to what are you getting for what you are paying :)

@Ken Nyczaj Look into streamlined business out of AZ all they do is real estate books. I use them for my real estate sales business. I agree someone else can do bookkeeping and let your CPA double check quarterly.

@Basit Siddiqi Thanks for your thorough response, he are some answers:

1) 4 shareholders

2) One state- in MD

3) Great question, I'm asking that tomorrow!

4) Another great question, also asking that tomorrow!

5) cost does include the business tax return but not personal.

So true and NOT all Bookkeepers, Accountants, CPA have the knowledge to be a QuickBooks Expert and vice versa.

Gita Faust

Originally posted by @Simon W. :

You need to look at it this way.

Not all Bookkeepers are Accountants and not all Accountants are CPAs.

Bookkeepers are typically just data entry with a little knowledge of accounting.

Accountants typically have a degree in Accounting

CPAs are licensed.

Not all CPAs know real estate and that goes with Accountants too.

A few times I had to teach a CPA to learn how to book certain items correctly.

You want someone that show you the financials and break it down to you in details. CPAs normally will not do that.

Hiring the right Bookkeeper, Accountant, CPA, Controller, CFO and an Advanced QuickBooks Certified is priceless. Do not let the title confuse you, because one person may not have the knowledge the other one has. 

  • What do you want out of your relationship? 
    • To get you to tax ready?
    • To know your assets, liability, and equity?
  • Are you looking for tax strategy?
  • Are you looking to patch your current situation?

And the list of questions would go on. 

Gita Faust